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Sunday, September 13, 2009

NOT in the PUBLIC`S INTEREST(BCUC DECISION)

The BCUC decision, a thoughtful,reasoned decision, despite pressure from IPPbc and Naikun and the BC government the comissionaires came up with the right decision, what part of NOT in the PUBLIC`S INTEREST doesn`t the media understand?(Part IV in the series, the BCUC decision)

I have read the BCUC july 27 decision, I actually read it twice,it`s a very technical hard to read report, I will give you the link but trust me, it`s 236 pages of technical jargon that is difficult to read,especilly for an average person like me.

The BCUC decision is broken down into many parts I will try to express the flavour of the decision in a way that you can understand, I have read Vaughn Palmer,Michael Smyth, and other media`s take on the decision and it is quite apparent the neither of them bothered to read the report,probably a little above their paygrade,especially Michael Smyth.

The long term load forecast

The panel at the BCUC after reading submissions from all interested parties have come to the conclusion that the load forecast from BC Hydro is so greatly exaggerated, the board felt that with new consumer technology (more energy efficient appliances,light bulbs etc) plus a more aggressive conservation measures that 1000s of KWH would not be required.

Aquisition of new power

The BCUC board came to the conclusion that BC Hydro could not make the case to the BCUC to grant BC Hydro permission to aquire long term expensive power, the BCUC spent a good deal of time on each section,despite submissions from Naikun/IPPbc, and BC Hydro, despite the access to millions of dollars of paid legal opinions that these outfits presented the BCUC was able to separate fact from fiction, now BCUC didn`t completely slam the door on private power but they gave a very measured response.

The BCUC has one major over-riding concern :To protect the ratepayer: The board`s biggest concern about aquiring this pricey power was that if the demand wasn`t there,the spot market price of non-firm power would mean that we,BC Hydro(the ratepayer) would be selling this excess power for less money than we committed to pay for it.

Burrard thermal debate, should we or should we not

The majority of the BCUC decision dealt with burrard thermal, Naikun,IPPbc,BC Hydro fought on many angles against Burrard thermal.

Naikun,IPPbc made the argument that burrard thermal had to run full out at 6000 GWH to meet the long term load demand, which is the part that stuck in Palmer and Smyth`s head, IPPbc and Naikun were making the case that burrard thermal would be ramped up to full capacity 24/7 365 days a year to meet long term load forecasts, even though Burrard thermal had barely run anywhere near that capacity for years or ever, this argument was dismissed by the BCUC on the grounds that the future load forecast was artificially increased.

Naikun and IPPbc argued that burrard thermal would require extensive upgrades to be able to supply power, they had price scenario`s for upgrading burrard thermal on three levels, A B C ---(A) being a modest amount of power,(B) being 3000 KWH and (C) being 6000 KWH ...(C) being the most expensive upgrade,somewhere in the range of 360 million dollars. The BCUC rejected this argument because of upgrades that have already been done and the fact that Burrard thermal has already proved it could provide the low end of firm power without problems. The BCUC also noted that mothballing Burrard thermal would mean aproximately a $100 million dollar investment to metro Vancouver substations to be able to link the power together.

Naikun and IPPbc argued that the price of natural gas was going to get very expensive,therefor making Burrard thermal much more expensive to operate,again the BCUC didn`t agree with their crystal ball as to natural gas prices in the future,the BCUC took middle ground as to future natural gas prices.

The BCUC came to the conclusion that Burrard thermal in the mid-range of power which it had produced on and off over the years was easily attainable, it went on to say that in all probability Burrard thermal wouldn`t be required to produce that power but in the case of a problem with transmission lines or an emergency that Burrard thermal was up to the task of producing that power.

Naikun and IPPbc argued that if Burrard thermal was an insurance policy that it should be required to produce over 6000 KWH annually,the BCUC rejected this argument,the BCUC determined that a mid-range insurance policy was sufficient.

In reading the 236 page report, despite it`s technical language and difficulty for a layman to understand......

One thing became quite apparent, Naikun and IPPbc and BC Hydro(under orders from Campbell) totally exaggerated the future load demand, and to me it was quite obvious why they were exaggerating the future load forecast, because if Naikun or IPPbc could CON-vince the BCUC about future load forecasts than the BCUC would of had to do one of two things.

The BCUC would of had to of ramped up Burrard thermal to full capacity 24/7 to supply these needs which would of required Burrard thermal to have major upgrades and of course that would mean Burrard thermal would be belching out much more GHGs into metro Vancouver.

The BCUC if it had fallen for the exaggerated future load forecast they would of mothballed Burrard thermal and allowed BC Hydro to buy a lot of expensive IPP power,which was the whole purpose of this latest exercise.

So the BCUC made the right decision, the BCUC made the case that there will be power already purchased coming on line soon,lets be cautious and see where that power takes us,the BCUC made a very moderate decision as to Burrard thermal,a mid-range insurance policy of what is described as firm power close to the major population centers.

And finally the BCUC in rejecting the vastly over exaggerated future load forecast the other decisions fell into place including a reasonable expectation of Burrard thermal,not the 24/7 full out capacity that Naikun and IPPbc were making.

Anyone who over-rides the BCUC decision is playing with fire,we are on the cusp of new energy efficient technology,the BCUC has reccomended a slow modest march forward,with Burrard thermal as insurance and if need be cheap imports of power as a last resort, there is no need to commit BCers to the potential risk of buying expensive power with no market available,thus costing BC Hydro and the ratepayers alot of money.here is the link to the BCUC 236 page report

3 comments:

Anonymous
said...

heh - Bc Hydro's cost of new generation is TWICE that of independents! And cheap Alberta imports means dirty coal combustion and massive pollution. There goes the environment and our species that are sensitive to climate change.

BC Hydro is short 6000 GWh a year. Its either coal, or dirty and expensive Burrard Thermal in the center of Vancouver, or its clean renewable energy such as wind or rivers.

The only reason Burrard is 'in play' is due to the wording of Special Direction 10 to the BCUC. That Direction requires that BC Hydro be CAPABLE OF supplying BC load solely from BC resources by 2016. It does not require that it actually happen. If Burrard is deemed to be physically capable of supplying (say)6000 Gwh, then BC Hydro can import 6000 GWh, not run Burrard at all and still be in compliance with the Direction. Running Burrard is almost always more expensive then importing, and so nobody in the industry expects Burrard to be run for more than a few hundred GWh per year, as in the past.

I agree completely,it is far cheaper to import power than to run Burrard thermal,and that goes for Run of River and especially wind power,imported power will be probably be in the range on 1/10 of the cost of private power.

After reading the BCUC decision,it`s quite apparent that IPPbc and Naikun were attacking burrard thermal and artificially hyping the future load demand for hydro....

It was very sneaky,they did their(IPPbc) best to make the case that burrard would be going 24/7 full out,they failed.

And lost in the argument is that BC/Powerex makes big money selling high and buying low....

What the BCUC was concerned about which you will never here my critics say is....

BCUC is concerned that BC Hydro will be buying high and selling low,especially with the glut of cheap power on the market.

My critics talk about IPPs paying 25$ per GWH to the province,that is a straw man argument......

Because if there is no one to buy that high priced power there will be no money left over,ne fee,no commission,no nothing except the ratepayer digging into his or her pocket to subsidize private IPPs, especially when your talking about non-firm power at the wrong time of the year....

And yes, Burrard thermal won`t be running,especially this year,the industrial electric use has fallen off a cliff.